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Showing posts with label Livemint. Show all posts
Showing posts with label Livemint. Show all posts

Tuesday, May 25, 2021

Put off the Olympics (Livemint)

This sports extravaganza, originally scheduled for the summer of 2020, has already been postponed once. Tokyo will be well advised to push it further down the calendar to 2022.

With less than two months to go before the Tokyo Olympics kick off on 23 July, Japan has been hit by a fourth wave of covid. Its second-largest city of Osaka is witnessing an explosion of cases that has overwhelmed its healthcare infrastructure, with beds, ventilators and essential drugs running short and doctors struggling to cope with it. On Monday, news emerged that its army had been deployed to conduct vaccinations.

Any event that requires thousands of people to converge from almost every country in the world and then disperse is bound to be highly risky from a pandemic perspective. Japan’s recent spike in cases has only raised anxiety levels. The host country was once seen to be doing better than others in keeping infections under control. But its vulnerability has risen sharply. Less than 5% of its population has reportedly been inoculated so far, and even emergency rapid-jab camps run by its armed forces may not be able to create the requisite rings of safety in time for the games. This sports extravaganza, originally scheduled for the summer of 2020, has already been postponed once. Tokyo will be well advised to push it further down the calendar to 2022.

Courtesy - Livemint.


Wednesday, May 5, 2021

A redux of the Linux movement in open source pharma (Livemint)

 Ajit Ranade

Thirty years ago, a 21-year-old student at the University of Helsinki put out a message on a bulletin board, “i am doing a (free) operating system (just a hobby, won’t be big or professional..)," and asked for feedback. Little did he know that these few words would be the beginning of a gigantic revolution that would transform digital life around the world. This was the birth of the free operating system that came to be known as Linux, named after the kid, Linus Torvalds, who invented it. It is the basis of all the open-source free software that powers most computers around us. For instance, all the world’s top 500 supercomputers run on Linux. More than 70% of mobile handsets run Android, which is free and open source, developed by Google and inspired by Linux. About 95% of public cloud services use an open-source hosting platform called Kubermetes, also part of the Linux revolution. Linux or its derivatives are in most embedded systems, automotive software, entertainment consoles, gaming, aviation and even high-end applications, including possibly space and defence. The ubiquity of Linux and its descendants is astonishing for something which is essentially free and developed by a community of tens of thousands of developers driven merely by their passion, not monetary gains. The free software is distributed under the Gnu Public License version 2 (GPLv2), whose key condition is that the complete source code be made available to the user, and any modification or improvement done by a user is to be ‘given back’ on the same terms to the open-source community. There are thousands of businesses that run on free software and are profitable. As all adherents to the free software dogma will tell you, it is free as in freedom (to modify) and not as in ‘free beer’. Thus, free software is not anathema to making profits. But the core ideology is allergic to patents and intellectual property rights, which ‘lock up’ knowledge, rather than keep it open for further improvements and creativity. Indeed, one maxim of free software developers is that “given enough eyeballs, all bugs are shallow", famously articulated by Eric Raymond. That is, all bugs get ironed out if the whole community is working on the software. The beta tester is the most valuable resource, and advocates of free software believe in frequent releases of newer versions, thus making it robust and stable.

Linus began his hobby project out of necessity, because he could not afford to pay for a Unix operating system to try out on his personal computer. But through his tinkering and by readily sharing his source code, he unleashed a movement. Maybe he accidentally stumbled onto a deep truism about creativity.

To be fair, the free software movement predates Linux by at least a decade. Its early diehard champion was Richard Stallman of MIT. For Stallman, not sharing the source code and not allowing users to modify stuff was a “crime". But his essentially centralized way of controlling the releases of free software ultimately stalled the idea’s progress and widespread acceptance. It was Linux which truly turbocharged the movement, with its highly decentralized approach to building software. It was much more democratic and non-hierarchical. Eric Raymond wrote about this contrast in a famous essay that became a bestseller, The Cathedral and the Bazaar. Happily, the two are very much intertwined and married, and referred to as Gnu/Linux or simply Linux.

This column space is too short to bring out the romance of the Linux movement and what it spawned. It is generous in allowing various ‘flavours’ of distribution to co-exist, of which a popular one is called Ubuntu, which means ‘compassion and humanity’ in Zulu. The programming languages R and Python, used heavily in the spheres of analytics, machine learning, artificial intelligence, visualization and econometrics, are also open source, linked to the GPLv2 licence.

The Linux movement gives us pause to think about intellectual property rights (IPRs) in general. At the heart of these are patents, which refer to the granting of temporary monopoly rights, so as to recoup the cost of developing the IP, be it software, a chip design, a drug or a vaccine. This crushing of competition to protect profits has always been a contentious issue, as there is mounting evidence that patents do not lead to a rise in productivity and further innovations. While patent filings have grown exponentially, innovation and productivity have not. And it has simply led to patent hoarding and trolling, plus endless litigation, especially in the field of pharmaceuticals. The saying here goes, ‘No patents, no drugs.’ A new drug now needs at least a billion dollars for development, but 80% of fixed costs are on phase 3 trials, which are in the nature of public goods. Surely, these costs can be reimbursed to parties through competitive bidding by the government. As economists Michele Boldrin and David Levine have argued in their essay, The Case Against Patents, the downstream social cost of monopoly pricing is most severe for life-saving drugs.

Indeed, since 2015, there has been an Open Source Pharma movement against restrictive patents. It supports the compulsory licensing of patents on life-saving drugs. According to Dr. Manica Balasegaram of the Access Campaign, open source pharma is against a protectionist proprietary silo-based approach, and promotes a culture of free and critical thinking, openness to ideas and sharing of information. Sounds similar to Linux, does it not? Happy 30th anniversary!

Ajit Ranade is chief economist at Aditya Birla Group.

Courtesy - Livemint.


Monday, April 19, 2021

As the second Covid wave hits hard, 1918 Spanish flu offers some lessons (Livemint)

Shashi Shekhar

Why didn’t the political class do anything when there was a ‘lean period’ during the pandemic?

There is an old saying: “If things are going out of control at present, look at the past." That’s how our ancestors always dealt with tough times. The rulers are getting cold feet over the devastation caused by the second wave of covid. But they are not even ready to take a look at history to learn any lessons. As a result, by Sunday, 1,47,88,109 people in India were in the grip of this deadly disease, while 1,77,150 have lost their lives.

At such a rare time, for the rulers, I want to quote one such great story documented in the pages of history. This story also has a lesson for the common people.

On 28 September 1918, the Liberty Loan Parade was organized in Philadelphia to economically support the soldiers who fought in World War I. Intellectuals opposed the event. They were of the view that since the Spanish flu was still going strong, a crowded event may result in a new series of disasters. Ignoring such objections, Philadelphia public health director Wilmer Krusen allowed the event. It was a matter of patriotism, so more than 200,000 people gathered. What followed was along expected lines. Within the next few days, 47,000 fresh cases were reported and 12,000 people lost their lives. The second wave of Spanish flu ended up wreaking havoc on 25- to 35-year-olds. In October that year, 1,95,000 people had lost lives in the US alone.

Just relate that tragedy to what is happening in India today. In September 2020, when the first wave of covid was on its last legs, our rulers were applauded. A few were happy over the possibilities of a vaccine, while others were hoping for a bounceback in the economy. Many states started promoting tourism, while others were busy in organizing events such as the Kumbh. Elections were also to be held in five states. From the top to the bottom, all leaders started attending huge election rallies to woo voters. In such a situation, if any expert had tried to advise them to be cautious, he would have been ridiculed. The warnings of those doctors and scientists were also ignored, whose throats had dried up stating that the threat of the pandemic was not over yet.

As if the demon of covid was preparing to attack again, waiting for our sons and daughters to come out of their shells. This time it attacked with double strength. Earlier, elders were the target, now newborns to senior citizens were all equally vulnerable. Health services have collapsed, there are not sufficient numbers of ventilators, oxygen and essential medicines are scarce, while hospitals do not even have beds for serious covid patients.

Until now, we used to tremble at the pictures of the way dead bodies were buried in the US, Brazil and Italy. Now our cities are in the same category. Shocking news came from the Harishchandra Ghat in Kashi—fearing that they may fall prey to the infection while waiting in the long queues, people paid an exorbitant price to the descendants of the ‘Dom Raja’ to get them to perform the last rites. Similarly, in Surat, so many bodies had to be burnt in one day that the chimneys of the electric crematorium furnace melted. In Raipur, too, on an average 55 bodies were cremated daily. Images of long queues at funerals in Lucknow went viral on social media. To prevent the proceedings from getting captured on camera, local officials covered up the crematorium with makeshift walls. They said this was done to prevent people from getting “distracted". Even in the national capital, people had to wait for five to eight hours for the last rites of their loved ones. This is the plight of all the cities in north and west India.

In such a situation, it is the right time to question our political class, who were busy in electoral and religious events. Why didn’t they do anything when there was a ‘lean period’ during the pandemic? They knew that another wave was coming. It was a time when we could have equipped our hospitals and increased the number of laboratories. If the government did not have the resources, it could have invited private players with the necessary regulations. When privatization can be promoted in other areas, why not in this? This could not happen. As the second wave is heading towards its peak, we also need to know that the Spanish flu attacked three times. Unfortunately, sometimes history repeats itself. What could not have been done between September 2020 and February should be done now.

Prime Minister Narendra Modi on Saturday took a sensible initiative. He asked Swami Awadheshanand to keep the Kumbh symbolic. This was a necessary step. Uttarakhand has recorded a nearly 90x increase in covid cases during this period. Most saints have accepted the prime minister’s request. This may help prevent any further adverse events.

In contrast, the Election Commission has decided to continue with the poll schedule in West Bengal, where the rate of infection has gone up by 560% due to public gatherings, while three rounds of voting are yet to take place. Statistics related to the infection spread show that if decisive steps are not taken even now, things could spiral out of control. The situation there is such that if decisive steps are not taken immediately, history will compare our present political leadership with Krusen.

Shashi Shekhar is editor-in-chief, Hindustan. The views expressed are personal.

Courtesy - Livemint.


Wednesday, April 14, 2021

Monsoon relief (Livemint)

At a time when our farm sector is going through turmoil, we have a spot of good news on the monsoon front. Skymet, a private meteorological agency, on Tuesday forecast a reassuring likelihood of India receiving normal levels of rainfall this year. If so, 2021 would be the third consecutive year of good rains for the country.

This bodes well for food production and should help keep a lid on some of our inflationary pressures. On Monday, data released by the government showed retail inflation at 5.52% in March, nearly half a percentage point higher than February’s reading, driven up partly by food prices. Although it’s still short of the Reserve Bank of India’s upper bound of 6%, any sharp rise raises anxiety over a possible overshoot. Monetary policy has been extra-loose for over a year now, and banks are inundated with liquidity. The central bank’s policy guidance made a subtle shift last week, suggesting a closer vigil on price movements and a need to keep its options open. After all, its inflation-targeting mandate had only just been extended for another five years. Favourable rainfall this year will reduce the risk of rising food bills clouding up its easy-money policy.

Courtesy - Livemint.


Saturday, April 10, 2021

Equity MF U-Turn (Livemint)

The losing streak has finally snapped. After eight straight months of net outflows, equity mutual funds saw net inflows of ₹9,115 crore in March. At the same time, debt funds saw outflows of ₹52,528 crore, after they got inflows of ₹1,735 crore in February, according to data issued Thursday by the Association of Mutual Funds in India.

So, does this mean retail investors have shifted favour back to equity funds? Such a conclusion may be premature. March figures tend to be influenced by year-end tax payments and portfolio rejigs, and these could explain some of the debt outflows. That equity-linked saving schemes were among the top performing categories among equity funds reinforces that possibility. To be sure, while tax saving schemes did well, inflows were decently spread among other equity categories, barring a few. Also, investments via systematic investment plans, or SIPs, hit a monthly high of ₹9,182 crore. Maybe all this is reflective of household income restoration after last year’s covid crunch. If so, it would be another aspect of ‘normalization’. Stock market indices have risen sharply in recent months. But it’s unclear how ‘normal’ these levels are.

Courtesy - Livemint.


Thursday, April 1, 2021

Internet-first brands are fast gaining traction (Livemint)

Shuchi Bansal

March witnessed frenetic action from internet-first brands., a direct-to-consumer (D2C) brand of multi-category fashion products, such as apparel, footwear, bags and accessories for men and women, raised ₹30 crore from IvyCap Ventures. The money, the company said, will be used to improve technology, consumer interface and newer product categories. A few days ago, homegrown organic skin and hair care products firm Juicy Chemistry raised $6.3 million in a Series A funding round led by Belgium-based investment firm Verlinvest. This was its first institutional fundraising for building brand and expanding business.

Beauty brand MyGlamm closed a ₹175-crore Series C round led by Ascent Capital, Amazon and Wipro Consumer Care Ventures, at a valuation of over $100 million. Although an online-first brand, four-year-old MyGlamm plans to increase its offline presence to 25,000 points of sales by the end of 2021 with a targeted run rate of ₹600 crore. It plans to use the funds for product development, tech research and offline expansion.

It’s not difficult to see why action is heating up in digital-first brands. In a February interview to Mint, Sumit Keshan, managing partner, Wipro Consumer Care, had said its investment theme is built around e-commerce companies, especially D2C (direct-to-consumer) brands, since e-commerce is an emerging sector that is likely to hit $100 billion in the next four to five years.

Earlier in March, a report by EY and IVCA (Indian Private Equity and Venture Capital Association) highlighted key e-commerce trends in India, including accelerated digitization, super-apps, IPOs and consolidation.

Ankur Pahwa, partner and national leader, e-commerce and consumer internet, EY India, said India is at an inflection point in digital transformation on the back of mass adoption by first-time consumers, technology innovations in digital payments, on-demand service and analytics-driven customer engagement.

Among emerging trends, the report mentioned the rise of the direct-to-consumer (D2C) model and omni-channel approach by large retailers and the evolution of the investor ecosystem with a new class of investors participating in the segment. It also said that in the next phase, tier 2 and tier 3 cities will bring hundreds of millions of consumers online. Another report by Praxis Global Alliance, a management consulting and advisory firm, in collaboration with Brands Decoded, an initiative of Knowledge Capital (a volunteer-driven community of founders and investors), said that e-commerce will add more than 200 million online shoppers over the next five years.

The boom in internet-first brands follows the ~25% compounded annual growth rate (CAGR) in India’s e-commerce market, it added. Several internet-first brands across categories such as food, jewellery, beauty care and fitness have crossed the ₹100-crore revenue mark. Unlike traditional brands that follow a multi-tier distribution structure, D2C brands bypass multiple supply chain partners, ensuring greater control over customer experience and direct connect with their target group, enabling engagement and repeat purchase, the report said. Their distribution costs are lower as direct delivery to customer cuts out middlemen, ensuring higher margins and better price to consumers.

Internet-first brands usually fill in the white space left open by traditional players as they are not averse to experimenting with niche products and ingredients. Yet, increasing competition and clutter, low customer retention and limited scale are some of the challenges online-first brands face, the Praxis report said.

On scale, Wipro’s Keshan said companies can get ₹100-300 crore, or even ₹500 crore, through the D2C route. “Can they take it up to ₹2,000 crore, that question we have not really dealt with, yet. So, e-commerce can definitely help you create a very strong business to a certain size, and it’s up to you if you want to go offline as an additional strategy—I don’t see any problem in that because it is an opportunity for you to grow and scale further."

Little surprise then that WOW Skin Science and WOW Life Science are looking to expand their beauty and wellness products via brick-and-mortar stores. So far, it sold on online marketplaces like Amazon, Flipkart and Nykaa. The brand said physical stores will be more relevant than ever as consumers want to try and test products before making a purchase decision.

Shuchi Bansal is Mint’s media, marketing and advertising editor. Ordinary Post will look at pressing issues related to all three. Or just fun stuff.

Courtesy - Livemint.


Friday, March 26, 2021

Cigar, or pancake, from someone out there (Livemint)

Dilip D'Souza

One of the truly stimulating things about writing this column is that periodically I need to revisit an earlier effort. It happened last week with the Collatz Conjecture; it’s happening again this week with ‘Oumuamua.

‘Oumuamua (broadly, Hawaiian for “scout") was an object that, in 2017, shot through our solar system. That in itself wasn’t so unusual: asteroids rush about, comets from Halley’s to Kohoutek zoom through, these things happen. But astronomers were fascinated by ‘Oumuamua for a few special reasons.

To start with, we first noticed the object only when it was already speeding out of the solar system, already at a distance of some 30 million km from us. This meant that it was only visible for a short while, and astronomers had to scramble to observe it before it vanished. That alone created something of an ‘Oumuamua buzz.

But more important, this was one strange object. Take its shape. Its brightness varied so much and so rapidly that astronomers concluded it had to have a peculiar shape. Why so? Imagine looking at a football that’s spinning as it flies through the air. However near or far it is, however much it spins, it will still look round. But now imagine a boomerang, flipping over and over as it flies. Clearly, its apparent size and shape will vary. If both were made of material that reflected the Sun’s light, the ball’s brightness would seem more or less constant; the boomerang’s, though, would go up and down with its flips. Something like that happened with ‘Oumuamua—its brightness varied over a period of about eight hours by a factor of 10, and that variation suggested it was cigar- or pancake-shaped.

Now most asteroids are generally round, though there are odd-shaped ones out there too. Toutatis for example, which in 2004 passed only about a million km from us, was roughly like a dumbbell. But a cigar or a pancake? And at a few hundred metres long but only a tenth of that much wide—some 35 metres—‘Oumuamua may have been a gigantic cigar, but a tiny celestial object indeed. And yet, the amount of light it reflected was several times greater than other asteroids and comets: why was it so shiny?

Then there was the way it moved. Comets zoom through our solar system, but they have distinctive tails made of dust and ice. This object had none. Yet it had shot past the Sun at a speed—about 90km per second—that in fact far exceeds a typical comet’s speed. What had propelled it to that velocity? Also, while comets follow a distinctive elliptical path, ‘Oumuamua’s path was nearly a straight line. What did that mean?

In any case, most astronomers concluded in 2017 that, even with its odd shape and high speed and gleaming surface, ‘Oumuamua was just another rock. Alan Fitzsimmons of Queen’s University in Belfast put it this way: “This is a natural object ... pretty much a space cucumber."

And there ‘Oumuamua’s story might have ended.

Except that some astronomers were sceptical of this conclusion. Prominent among them is Abraham Loeb of Harvard University. In articles, scientific papers and now a new book (Extraterrestrial: The First Sign of Intelligent Life Beyond Earth), he suggests that ‘Oumuamua was really ... a spaceship dispatched by an alien civilization.

Yes: an extraterrestrial intelligence.

All its observed peculiarities contributed to that impression for Loeb. But there was a particular “eyebrow-raising bit of data" that was even more peculiar, he noted. A comet’s path through our solar system is governed in large part by how the Sun’s gravity acts on the comet. This is why we can trace its path and precisely predict when it will next approach the Sun and be visible from the Earth (Halley’s Comet? July 2061). But ‘Oumuamua’s path, as I mentioned briefly above, was quite different. While the Sun’s gravity had an effect on ‘Oumuamua, it does not fully explain its motion.

So what does?

There’s a Rashomon-like quality to how astronomers have answered that question. No doubt you’ve heard it said that when presented with different explanations for a mysterious phenomenon, Occam’s Razor applies: the simplest explanation is most likely the correct one. With ‘Oumuamua, faced with deciding whether it was a strange rock or a spacecraft built by aliens, most astronomers chose to believe in the rock. That’s because, to them, the simplest explanation was a rock. No need to spell out who built the spacecraft, how it is fuelled, who’s travelling in it and more. This also helps explain why the whole Search for Extraterrestrial Intelligence (SETI) effort has always had its fair share of sceptics. Just grasping the idea of another intelligence altogether seems difficult, almost like a flight of fancy, a leap of faith.

But to Loeb, Occam’s Razor applied in precisely the opposite way: the simplest explanation for ‘Oumuamua, Loeb believed, was that it had been crafted and dispatched by an alien civilization that’s somewhere out there. Will we ever know for sure which of these is right?

Well, that may depend on what we mean by “for sure". We can no longer examine ‘Oumuamua itself, that’s for sure. (Or at least not from where we sit today, but hold that thought). What’s left is the evidence. Or, in this case, attitudes to the evidence, how we interpret the evidence. Consider what Loeb made of just one aspect of it all, the unexpected way it reacted to the Sun’s gravity. Specifically, how it accelerated to its remarkable velocity as it receded from us.

Loeb thinks that happened “due to radiation pressure from the Sun." In effect, he suggests ‘Oumuamua is like a sail, a thin sheet spread wide to catch, in our corner of the universe at any rate, “solar wind" from our Sun. That’s the photons of light that stream from the Sun. A sufficiently light object could be propelled by such a stream. Out in space, it would be enough to push ‘Oumuamua, if it is actually such a “lightsail", to far higher speeds than any engine could—the kind of speed that ‘Oumuamua exhibited anyway.

Understand that this is not something out of science fiction. The Breakthrough Starshot programme—which Loeb advises, incidentally—has already sent prototypes of such crafts into space, even using an Indian rocket (see my column “Tiny SpaceChips to take us to stars", 5 August 2017, Sails are not natural creations; on and around the Earth, the only ones you’ll find are human-made. So, if we humans are contemplating and now building sails to catch solar winds, why shouldn’t another civilization have done the same?

It’s true that Loeb’s ideas have been greeted with scepticism and even scorn. But after all, that’s the way science must progress. In any case, Loeb remains undeterred. In an article in Scientific American, he writes that ‘Oumuamua’s very strangeness has “the potential to usher in a dramatic new era in space science".

In that vein, he spells out a fascinating challenge for us humans. Even if ‘Oumuamua has vanished into the darkness, it will take “thousands of years to leave the solar system entirely". This gives us time and a unique opportunity: “Getting a closer look [at ‘Oumuamua] through a flyby remains a possibility if we were to develop new technologies for faster space travel within a decade or two."

Carl Sagan once said: “Extraordinary claims require extraordinary evidence". Take that a little further and think of this: What can we learn from an extraordinary mission to catch up to ‘Oumuamua?

Once a computer scientist, Dilip D’Souza now lives in Mumbai and writes for his dinners. His Twitter handle is @DeathEndsFun

Courtesy - Livemint.


Thursday, March 25, 2021

Content on OTTs: Between a rock and a hard place (Livemint)

Shuchi Bansal

For the last six months, a Mumbai-based producer was deeply invested in putting together proposals for two web shows, to be aired on top video streaming platforms. The script, episodes, director and tentative cast was in place for one, and a firmer plan with actors signed up was ready for the other. Today, both her proposals seem untenable and are on the back-burner as their storylines involved depicting media. Other than religion and politics, media, too, is suddenly a taboo topic for India’s over-the-top (OTT) video streaming platforms after the fear psychosis created by multiple complaints, FIRs and court cases against webs shows, their directors and platform executives.

The producer, left high and dry with her stuck projects, said she is not alone in her misery. It’s mayhem out there in Mumbai’s content production industry. “Everyone I know is on the edge not knowing what stories to pick. Streaming platforms are turning new pitches upside down and shelving the next seasons of the existing shows for fear of offending somebody— anybody," she said. It could be the government, politicians, religious groups, nationalists— the list is endless.

To be sure, trouble for streaming services started even before the government notified the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, that now govern India’s OTT platforms. Political thriller Tandav aired on Amazon Prime Video allegedly offended religious sentiments leading to complaints and FIRs against the series producer, director and platform executives. In fact, the Allahabad high court denied pre-arrest bail to Aparna Purohit, the India head of originals at the company, although it was later granted by the Supreme Court. The series director too had to apologize and alter scenes after the information and broadcasting ministry intervened.

Clearly, the Tandav incident has spooked Mumbai’s content studios. Besides, even though the government kept promising a light-touch regulation, its new guidelines for the OTT sector have not instilled any confidence either.

Under the new rules, after two-tiers of apparent self-regulation, the third tier of complaints’ redressal involves an oversight body of government officials headed by a joint secretary level officer authorized to issue directions to block content.

Not surprisingly, producers are looking for ‘safe’ subjects to feed India’s sunrise streaming sector. According to a September 2020 report by KPMG, more than 40 video streaming platforms in India with firms such as ALT Balaji, Zee5, Disney+Hotstar, Netflix and Amazon Prime Video, among others, grew by leaps and bounds in 2020. The year saw OTT advertising revenue grow at 26% CAGR (compound annual growth rate) over 2019 to reach ₹3,400 crore. Subscription revenue also grew 60% to touch ₹1,900 crore, the report said. It said that India had 22 million viewers watching subscription-led video-on-demand (VoD) content in 2020 projected to touch 57 million by 2022.

With the nature of content on OTT platforms likely to change, it remains to be seen if the sector maintains its growth rates in India.

Luckily the bigger platforms are subscription-led and so consumers may stay invested as they have vast international content libraries to offer.

However, a platform executive flagged concerns over the new rules around age classification of all content. “Our rules are different from those global platforms follow in other markets. To abide by Indian law, we will have to sit and manually reclassify all our global content again— which seems like an impossible task for now," he said.

The business in the sector may be affected, too. The producer mentioned above said if her shows don’t go on the floor her cash flows will be affected.

Right now, thanks to OTT platforms studios are flooded with work. But if global firms are not able to monetize the shows made here, they may start rethinking their investments.

“Art and films mirror society. But at the moment the situation does not allow content producers to reflect what is happening in the country," said Raj Nayak, a media industry specialist. “And that is a big challenge," he said.

Yet others feel creative writers and directors can still send subtle messaging through their content. This is their real test on how they deal with the curbs on freedom of speech. They will need to be creative with their content.

Shuchi Bansal is Mint’s media, marketing and advertising editor. Ordinary Post will look at pressing issues related to all three. Or just fun stuff.

Courtesy - Livemint.


Wednesday, March 24, 2021

Beware of taxes when buying bonus preference shares (Livemint)

Gautam Nayak

Very often, one may find certain preference shares being traded in the stock markets at fairly attractive yields and, given the depressed yields in the debt markets, one may be tempted to buy these. Even with the dividends now being taxable, on holding to maturity, one may feel that the post-tax yield is far better than the yields available on debt instruments of similar maturity. But if you are an investor with taxable income in the higher brackets, you will need to do a little more homework and check your potential tax liability.

If the preference shares have been issued by the company at an issue price through subscription, there should be no difficulty, and you can go ahead with your purchase decision on the basis of the post-tax internal rate of return (IRR) based on your normal simple computation. However, if these preference shares have been issued by the company to its equity shareholders by way of bonus, you need to pause and do the math again.

This is on account of the fact that the redemption proceeds of bonus preference shares amounts to dividend, which is now taxable in your hands, along with the dividend on the preference shares. Your calculation, therefore, goes haywire on account of the tax.

The definition of dividend refers to the distribution of accumulated profits by a company, if such distribution entails the release by the company to its shareholders of all or any part of the assets of the company.

Way back in 1964, the Gujarat high court analysed a case of redemption of bonus preference shares and held that, when bonus preference shares were issued, it did not amount to dividend as there was no release of assets of the company. However, the Gujarat high court held that, at the time of redemption, there was a release of assets by the company, resulting in taxation as dividend. This decision of the Gujarat high court under the 1922 Income Tax Act, has been also affirmed by the Authority of Advance Ruling in a ruling in 2005, where it confirmed that the position was the same even under the current Income Tax Act.

Consider a simple example. You have bought a preference share with face value of ₹100, bearing a 6% dividend, and maturing after one year. If the share is available at ₹90, you would presume that your post-tax yield to maturity would be about 14.5%, factoring in a long-term capital gains tax of 10% on the appreciation of ₹10, and the tax on dividend at about 33% of ₹6.

However, if the entire redemption proceeds are taxable as dividend, then after factoring in a tax of about 33% on the entire ₹106, you are left with only ₹71, giving you a negative yield—of about -21%. You are, therefore, actually out of pocket.

The first reaction of an investor normally is—I have purchased those shares subsequent to issue as bonus shares. How can this be treated as a dividend in my hands?

In the Gujarat high court matter, the bonus preference shares had been purchased by the taxpayer. The high court had yet held that it made no difference as to whether the shares were purchased subsequently by the investor, and not received as part of the issue by the company.

The next question that arises is whether the investor can claim the purchase cost of the shares as a deduction from the redemption amount taxed as dividend. This issue was expressly considered by the Gujarat high court, which rejected the claim. Besides, the amended law as it now stands is clear—against dividend income, you can claim only interest as an expense, and that too only to the extent of 20% of dividend income. Therefore, the gross redemption proceeds would be taxed as dividends, without deduction of the purchase cost incurred.

Can you claim the capital cost of the shares as a capital loss? This seems to be possible since redemption amounts to a transfer of the security, and there is a redemption amount, which is however taxed under a different head of income.

Conversely, if you are an original allottee of the bonus preference shares and if you sell these before redemption, the entire sales proceeds would be taxed as a capital gain,and not as a dividend. The cost of acquisition would be taken as nil, as in the case of bonus equity shares.

As an investor, if you are holding such bonus preference shares, you should sell these shares before maturity to avoid such tax on redemption.

Alternatively, you can gift them before maturity to such family members whose income is not required to be clubbed with yours, and whose income, even after factoring in such maturity proceeds, would not be taxable.

Otherwise, don’t be surprised to find that the company has deducted tax at source even on the redemption proceeds. As the saying goes, what seems too good to be true is too good to be true.

Gautam Nayak is partner at CNK & Associates LLP.

Courtesy - Livemint.


Monday, March 22, 2021

Why rejection rate of insurance death claims is very low (Livemint)

One key reason why people hesitate to buy life insurance in India is, some say, because of the low death claim payments in the sector. Nothing could be farther from the truth. Claims payment in life insurance is extremely high and several regulatory provisions ensure this.

In 2019-20, over 1.8 million death claims were paid in India. Fewer than 14,000 claims—a fraction of those paid—were rejected. Life insurance can have no exclusions, except suicide, in the first year of purchase. This was not always the case. About 15 years ago, it was routine for life insurance companies to exclude death due to certain reasons and in the initial insurance period. This clause has now been scrapped in all products. The only thing that buyers must be careful about is the difference between life and personal accident insurance. Both pay an amount on death; whereas in a life insurance, death can be by any cause, a personal accident insurance covers only accident-related death. The personal accident insurance has various exclusions such as death due to risky activities or by substance abuse. These exclusions, however, are not allowed in life insurance.

In a life insurance claim, you just need to establish that the insured person has died, and a death certificate is the primary document for that.

Claims can be rejected only if a buyer hides information when filling the proposal form. This is not uncommon and, typically, the information hidden relates to poor health and other insurances that a person has already bought. Both these bits of information are necessary for insurers to properly underwrite the insurance. Adverse health indicates less longevity and an excessive amount of insurance is a red flag for insurers to look into. Recent court judgements, including in the Supreme Court, have clarified that non-disclosure of material information when buying insurance is ground for declining a claim.

However, rejections on grounds of non-disclosure are going to become even more difficult because of a relatively new provision in law that a life insurance claim cannot be rejected after three years of the policy coming into force. The rationale is that a deliberate non-disclosure will result in death within three years which can be investigated. These regulations ensure life insurance death claims get paid. This 3-year stipulation is a strong incentive to buy life insurance early because claim rejections become so much harder with time.

Not only do claims get paid, there are regulations to ensure they get paid fast. The Protection of Policyholder Interest 2017 regulations require that in death claims, all documentation requirements be raised simultaneously rather than piecemeal, within 15 days of intimation. Also, a claims decision, even if investigation is needed, must be made within 90 days of intimation. Payments then have to be made within 30 days of the decision. In case of delays, insurers must pay an interest of 2% over the current bank rate. This would be about 7% today. The interest paid on account of settlement delays as well as claim settlement periods are reported and actively discussed by insurers in their boards and policyholder protection committees. About 99% of the claims pending on 31 March 2020 were pending for less than 6 months. And the reason for delay in most cases is that claimants have not sent all the details that were asked for.

Once you have bought life insurance, the insurer must renew it each year for the term you selected even if your health worsens. There is a grace period of 30 days after the renewal date to make your payment, except in monthly payments where the grace period is 15 days. If you do not renew in time, your insurance lapses. In the first six months after a lapse, insurers will generally reinstate your insurance at your request with just a declaration of good health. However, after six months, they can refuse to renew, or charge you more.

The essence is that you must buy term insurance as early as possible, ideally when you start working, without worrying about claim settlement. And then renew your insurance punctually each year.

Kapil Mehta is co-founder and chief executive officer of SecureNow Insurance Broker Pvt. Ltd.

Courtesy - Livemint.


Thursday, March 18, 2021

New, woke HUL: changing buyer perception on beauty Clichés? (Livemint)

Shuchi Bansal

At the end of January, when Sanjiv Mehta, chairman and managing director of Hindustan Unilever Ltd (HUL), was asked about the spat with Sebamed over the latter’s ad comparing beauty soaps Dove and Lux to detergent brand Rin, he told Mint that the company knows how to protect its turf —“and we will protect it. I’m very emphatic about it."

True to his word, Mehta, who helms India’s largest consumer goods company, seems to have upended Sebamed’s game by changing the narrative around Dove advertising through #StoptheBeautyTest campaign, which takes a higher moral ground on the unjust beauty test Indian women have to undergo during matchmaking. In its new ad film, Dove raises concerns over unfairly judging women based on looks, cleverly extricating itself from the pH debate it got pulled into by Sebamed’s ad claiming that pH levels in HUL’s beauty soaps and detergent brands were similar.

The Dove campaign, meanwhile, comes as a part of HUL’s self-proclaimed overarching effort to evolve the definition of beauty across its portfolio of brands.

After replacing the word “fair" with “glow" in its popular Fair & Lovely face cream, the company, more recently, announced that it will eliminate the usage of ‘normal’ from its brand communication and packaging for beauty and personal care products.

The company will promote equitable and inclusive beauty, and not digitally alter its models’ shape, size, proportion or skin colour for its brand advertising. It also promised to include under-represented groups in its campaigns.

The answer to why HUL is making an attempt to distance itself from beauty stereotypes may lie in the same set of struggles that most legacy companies face when they are challenged by a tectonic shift in the marketing battlefield.

“They are faced with a new reality which they aren’t necessarily too familiar with. Their size also limits their agility to an extent, allowing more nimble brands to capture niche markets and new consumer groups from right under their noses. This is a time when consumers aren’t stereotypical anymore," said Sanjay Sarma, founder of branding and communication advisory SSARMA Consults.

For the consumer, what matters today is how good a company is: “Not just product-level good but a larger good. A moral compass is as important a yardstick as other brand attributes to measure them. And, that’s probably what HUL is attempting to discover," Sarma said.

HUL going “woke" has also been triggered by the advent of social media and its near-ubiquity. “I think it is both a smart as well as a socially responsible move for the company for which it should be commended. I guess this will help them better control the narrative of their brands and keep their images positive among the younger generation of new consumers," said Samit Sinha, managing partner, Alchemist Brand Consulting Pvt Ltd. At the same time, there is not much risk of diluting the brands’ equities among their more traditional and loyal consumer bases, he added.

However, the key challenge for brands in India remains its lack of homogeneity–not cultural or linguistic–but the enormous socioeconomic disparities. HUL addresses almost all socioeconomic classes in the country, which is both an advantage as well as a problem, said Sinha. While this offers its products a huge market and, therefore, the potential of large volumes, it makes it that much harder for the company to employ a one-size-fits-all marketing strategy for many of its brands.

Sinha said Glow & Lovely (formerly Fair & Lovely) has deep market penetration. “And for a large portion of this market there is no taboo at all in wanting to become fairer. In fact, this has been culturally hard-coded into their psyches over generations and they neither see it as discriminatory nor as racially insensitive. To these consumers replacing the word ‘fair’ with the euphemism ‘glow’ makes little or no sense," he said.

Yet HUL needed to do the right thing and align with the emerging consumer mindset, especially among the millennials and GenZ, who are taken in by socially-conscious, smarter and sustainable new-age brands.

Sarma, however, expects more from HUL than just play on perception. It needs to change and innovate product lines, not just nomenclatures and descriptors, he said, as the consumer is smart enough to notice it.

Courtesy - Livemint.


Friday, March 12, 2021

Artificial Intelligence: The great oxymoron of our times (Livemint)

An AI cyber-cop crackdown on chess conversations for racism tells us what we should have known all along: that algorithms created by fallible humans cannot be infallible

Michael Jackson was wrong, it turns out. It does matter if you're "Black or White". Algorithms that constitute the top oxymoron of our times, Artificial Intelligence (AI), have affirmed as much in their latest avataar as cyber-cops. Last year, a popular YouTube chess channel called Agadmator got suspended for flouting the site's guidelines. The reason for this, it has just emerged, was the 'racism' detected by AI cyber-cops in the use of words like "black" and "white" in conjunction with terms of aggression like "attack". Cyber-policing is done sneakily, and offenders are not notified of their violations, so it took an Indian avid chess player and scientist, Ashique KhudaBakhsh, 38, six weeks of experimentation to identify what led to the crackdown.

Chess players, of course, are known for an ability to escape traps, but that is usually if they have a human mind at the other end. On the internet, short of playing with chess pieces acceptable to rule-enforcers (pink and grey, anyone?), they may find the going hard.

Defenders of AI will offer the usual defence: that AI is imperfect right now, but is evolving so fast--a language tool called GPT-3 has started writing what many geeks consider poetry--that its 'intelligence' will start showing up soon. This optimism is drawn from another prized contradiction in terms called Machine Learning. All this is part of a technological revolution to minimize the role of human judgement, which is seen as fallible at the best of times. Human folly, we are all acquainted with. What few care to explain is how algorithms designed, fed and taught by fallible beings can be infallible.

Courtesy - Livemint.


Tuesday, March 9, 2021

Decoding CBDT’s clarification on non-residents (Livemint)

Gautam Nayak

Many non-residents were forced to remain in India during covid and could not travel back to their home countries due to the absence of international flights or had to remain in India due to a complete lockdown in their home countries. In many such cases, the non-resident was in India for more than 182 days during the current financial year, and under tax laws would therefore be regarded as a person resident in India.

Given that the Central Board of Direct Taxes (CBDT) had issued a circular in May 2020 giving relief to such persons for FY20, there was hope that a similar relief would be granted for FY21. However, the budget contained no relief in such cases.

A taxpayer had filed a petition in the Supreme Court seeking directions to the CBDT to provide such relief for the current year, and the SC directed the CBDT to take action. Finally, the CBDT issued a circular on 3 March, clarifying the position.

The CBDT said that in most cases, a short stay would not result in residency in India. It has then reasoned that since most countries have the condition of stay for 182 days or more for determining residency, in most situations, a person will be resident in only one country. According to the CBDT, if a general relaxation of the 182 days’ stay period is granted, it may amount to a case of double non-residency with no payment of tax in any country.

The logic given is that even in cases where a person is a dual resident, the provisions of the Double Taxation Avoidance Agreement (DTAA) with his home country provide for a tie-breaker test to determine the country of which he is resident. It has further been explained that even if a person is resident in India, he would normally be a resident but not ordinarily resident (RNOR), with foreign income not taxable in India, except such income from a business controlled in, or a profession set up in, India.

In case of employment income, the CBDT has clarified that if an employee of a foreign company has got stranded in India, and works from India, under the DTAA, his salary will not be taxable in India unless he has been in India for 183 days or more. It has pointed out that the person treated as a resident in India will be entitled to tax credit for taxes paid in any other country. The CBDT has cited the observations of the OECD and the guidelines and clarifications issued by the US, UK, Australia and Germany in this regard, and come to the conclusion that the possibility of double taxation does not exist as per domestic tax law read with the DTAAs due to forced stay in India.

However, in order to understand possible situations in which a particular taxpayer is facing double taxation, the CBDT has sought relevant information from individuals in a specified form, so that it can examine whether any relaxation is required to be provided in a matter, and if required, whether general relaxation should be given or specific relaxation for that individual. This form is to be submitted online by 31 March.

It is important that persons impacted make their representation to the CBDT to demonstrate the significant impact that being resident in India could cause to them. The most common case is that of NRIs who come to India every year for three-four months to stay with their relatives, or persons who have become NRIs in recent years. Such persons may be regarded as resident and ordinarily resident in India as a consequence of having been in India for more than 729 days in the past seven years. Their worldwide income would be taxable in India, including income that is exempt in their home country such as income on their pension or retirement accounts, as well as investment income.

There would be no exemption for such income under DTAAs. There would be little or no tax credit available, since such income would either be exempt in the foreign country or may fall in a low tax bracket, resulting in low payment of tax in that jurisdiction. Even if tax credit is available, the tax rate in most foreign countries being lower than in India, most taxpayers may end up paying the higher Indian tax rates on their entire worldwide income, and not just their Indian incomes. Coupled with the tax paid in the home country, the effective overall tax rate would be the higher of the tax rate in both countries. The worst part is that even a low income in home countries, when translated into rupees, may appear quite substantial due to the rupee’s low value, and may result in a taxpayer falling in a high slab, with high rates of tax.

It is important that the CBDT recognize these practical problems, and grant relief to such persons, who may end up with higher tax liability for no fault of their own.

Gautam Nayak is Partner, CNK & Associates LLP.

Courtesy - Livemint.


Friday, January 15, 2021

A positive step forward in the regulation of fantasy sports (Livemint)

Arun Prabhu , Amrit Mathur

Niti Aayog’s draft guiding principles on their regulation have the potential to drive innovation and growth of the industry and enable India to emerge as a global hub for fantasy gaming.

The draft ‘Guiding Principles for the Uniform National-Level Regulation of Online Fantasy Sports Platforms in India’ proposed by Niti Aayog have fuelled much discussion around the regulation of online fantasy sports.

As they are played online, usually on mobile devices, online fantasy sports tend to be confused with a diverse category of activities loosely termed online gaming, which practically range from games of chance to sports betting.

Driven by increased mobile internet penetration and user engagement during the pandemic, the focus on this space has increased of late. Unfortunately, as in many cases where dissimilar things are lumped together, not all of this attention has been positive. Incidents motivated by short-term profit and unconcerned with legality or protection of users have been witnessed, highlighting the urgent need for intelligent regulation.

Fantasy sports as a concept originated in academia as informal baseball fan leagues and have evolved into effective means for continuous fan engagement and growth of real-world sports. They serve essentially as a technology-enabled platform, offering sports enthusiasts a more engaging experience by elevating them from being mere viewers to active participants in the sport. Fuelled by improved internet connectivity and rapid proliferation of smartphones, fantasy sports today boasts of a massive user base of over 100 million.

Their appeal also stems from their unique propensity to encourage users to test their knowledge and acumen of their favourite sport against fellow enthusiasts. The players are required to rely on their adroitness to be able to create a team that they think will perform the best in the upcoming real-life match. Statistics show that 80% users of fantasy sports participate in contests for free, purely as a means of entertainment and to engage in their favourite sport. Even for users who participate in paid contests, the average ticket size is as low as ₹35 and more than half of such users win back their fees or more. Interestingly enough, more than 99% of all fantasy sports users have either won or lost less than ₹10,000 net in their lifetime. Fantasy Sports are intrinsically non-addictive and are consumed by a relatively more mature audience base, between the ages of 25 and 40. A report by Kantar and the Federation of Indian Fantasy Sports (FIFS) reveals that 60% of the users of fantasy sports started watching and following more sports than before and 59% of the users started watching new types of sports. This increase in viewership and revenue has also made sports a far more remunerative and appealing prospect for athletes.

Fantasy sports put the fans back at the centre-stage of all sporting events. They ensure that the interest of viewers drives the growth of the sporting industry in India. Recently, Dream11, the biggest fantasy sports platform in India, sponsored the Indian Premier League, which is the most prestigious cricket league hosted in the world today. This is an example of how the collective strength of sports enthusiasts and fans can drive the entire sports industry and empower it to become self-sufficient.

This unique nature of fantasy sports has also resulted in their recognition as a differentiated category under law. While legislation in the space is notoriously antiquated, inconsistent, and focussed on prohibiting gambling, the actual playing of sports and games involving skill has long enjoyed protection. Recent legislative initiatives in south India, driven by concerns around online gambling and their effect on youth, have blurred some of these lines.

Fortunately, online fantasy sports have been examined at length by various courts, and the evident requirement of skill, knowledge and adroitness to play them has resulted in their being classified as a protected category under the law.

Additionally, the existing self-regulatory regime to which a vast majority of online fantasy sport operators have committed themselves is sufficiently protective of user interests. The all too often quoted bogey of fantasy sports being used as a proxy for sports betting has also been soundly refuted by these self-regulation rules.

Similar to their physical counterparts, the operators of online fantasy sports have been early movers in ushering in responsible and effective self-regulation.

The Niti Aayog’s discussion paper, which proposes several important guardrails around advertising, gameplay formats, responsible gaming, independent evaluation, grievance redressal, and perhaps most importantly, regulatory certainty and consistency, is a welcome step in the evolution of this industry.

The emergence of fantasy sports and their increasing popularity have also made India a very attractive proposition for investors. The industry has already received ₹1,000 crore in foreign investment and is expected to attract an additional ₹10,000 crore in the next five years. Furthermore, the industry is projected to cumulatively contribute ₹13,500 crore in taxes to the Indian government and create additional 12,000 jobs through direct and indirect employment in the next few years.

Niti Aayog’s guiding principles come at a timely juncture and propose progressive reforms that will accord fantasy sports a national and uniform safe harbor that is conducive to innovation and growth of the industry. Under a supportive and facilitating regulatory framework, fantasy sports have the potential to drive tremendous economic growth and enable India to emerge as a global hub for the industry.

Arun Prabhu and Amrit Mathur are, respectively, partner, Cyril Amarchand Mangaldas and former general manager, Board of Control for Cricket in India.

Courtesy - Livemint.


Wednesday, January 13, 2021

The tangled balls of untruths that too many Indians harbour (Livemint)

Anurag Behar

The May heat had penetrated the thick stone walls and double-height ceiling, melting all restraint. The tale telling began with how his stone-studded rings, one on each finger, ensured that he was never transferred out of that one school. Another teacher followed, swelling with pride on his own ingenuity in averting the evil eye by shutting down his school on every eclipse. The heat glued my eyes shut.

I awoke to an assertion that Dalits and Muslims were in general bad people, with a few exceptions like the wonderful colleagues present, while the depravity of Christians was of another order, most evident in their drinking of blood, preferably cow blood, on Sundays in the darkness of their churches. The teacher sitting next to me challenged him, “How many Muslims do you know?" He responded, “Two families." Are they bad people? “Very honourable," he said. How many Christians did he know? None. Had he ever seen a church? No. He got the drift quickly and closed the conversation with, “This is the problem with all of you; silly argumentation to refute fundamental truths."

The identifiably Muslim teacher felt obliged to diffuse the tension. He was a master raconteur. The last leg of his journey to the Yogi’s cave, along with his brother, was an on-foot trudge of 13km. The Yogi had foreseen their quest and made the brother lie on a boulder. In one flowing movement, his hand went into the brother’s chest and took out his heart. He held the heart up for 9 minutes, uttering incantations. The hand went back in, inserting the heart in its rightful place. Since that day, all of the brothers’ multiple debilitating diseases have vanished. Even Gautam, my colleague and the instigator of this session of tale-telling to excavate the beliefs of teachers, was left nonplussed by the heart suspended in mid-air.

Since that scorching day 10 years ago, I have heard similar notions from countless teachers. At their core are untruths and falsehoods. Manifesting often in the form of prejudice, superstition, and discrimination. And also acting as a filter for judging other things to be true or untrue. Each untruth readily gathers a tangled ball of other untruths. Neither this phenomenon nor this bunch of common untruths is particular to teachers. Indians typically share them in equal measure. Equally, there are a notable number of teachers who are uninfected by these untruths, nor is their mental apparatus to judge truth corrupted, like many other Indians. These two things are entwined: the capacity to sift truth from untruth, and the truth of one’s beliefs. Let’s call them ‘epistemic capacity’ (‘epistemic’ is merely a fancy word for ‘relating to knowledge and its validation’).

The insurgent mob that overran the Capitol in Washington DC capped eight weeks of a dramatic demonstration of how poor, fragile and corruptible is the epistemic capacity of large swathes of US citizenry. Millions of Americans are unable to grasp the simple truth that Donald Trump lost the election. The incendiary role of the President and his feckless cheerleaders, not just in the past few weeks, but over the past four years, cannot be overestimated. However, that doesn’t reduce the culpability of each individual involved in this crazy movement, nor explain the woeful failure of their epistemic capacity.

The institutional guardrails of US democracy are strong. Most other countries would not have survived such an assault from within. Indeed, both history and the present are strewn with the corpses of democracies felled by systematically unleashed untruths, or, withered to a charade of democracy only in name.

So, what of Indian teachers and their tangled balls of untruths?

Education is the only systematic way to develop the epistemic capacity of a people, of a country. Without doubt, along with the courts and media, the US education system has been central to its institutional guardrails—far from perfect, but delivering. But we are familiar with the state of Indian education—everything must improve.

Children learn from untruths in their teachers’ behaviour as well as from their pedagogical capacity for, and attention to, developing the ability of their students to parse inputs for truth. All three dimensions must grow: the teachers’ own epistemic capacity, her educational capacity, and the emphasis on developing the epistemic capacity of children as an aim of education. Also urgent is the firewalling of teachers’ behaviours based on untruths, which must stay outside school precincts.

From 2021, let us recommit ourselves to improving Indian education. Not with the narrow goals of literacy, numeracy, subject knowledge, or employability—all of which are necessary. But as a mechanism for guarding and nurturing democracy by enhancing our epistemic capacity as a people.

We should do this without the hubris that education can solve all, or is fail-proof. For it is not. Nor even with the illusion that epistemic capacity is sufficient. The senators in the US chamber defending the mob as it surged did not lack that. What they lacked is empathy and ethics. Education must be dedicated to what is true, what is right, and what is good. As also the wisdom to weigh the three before acting, and then the fortitude to live with those choices.

Anurag Behar is CEO of Azim Premji Foundation.

Courtesy - Livemint.


Monday, January 11, 2021

Stability in focus (Livemint)

While the covid crisis is widely expected to leave our economy scarred in various ways, one big question is whether it would also leave us with worse risks of overall instability. The Reserve Bank of India’s latest financial stability report offers an assessment. Loans going bad are one point of worry. While gross bad loans as a proportion of total loans are seen as benign for now, the pandemic’s effect is projected to show up with a lag. In a severe scenario, this ratio could spike to a 25-year high of 14.8% by this September. Even a baseline case puts this figure at 13.5%, with state-run banks watching their asset quality fall more than private lenders.

Another major cause for concern arises from asset values being inflated by all the extra liquidity sent sloshing around the world by central banks in their effort to stimulate economic activity. Indian asset markets have seen huge inflows from abroad and equity prices in particular may have already run ahead of levels that we can justify on the basis of expected corporate earnings. This poses a risk not just of a sudden reversal of capital flows, but also of money ending up where it should not and distorting India’s growth.

Courtesy - Livemint.


Saturday, January 9, 2021

For Biden to solve inequality, he’ll need good Wi-Fi (Livemint)

Determining precisely who in the country has internet and who doesn’t would greatly improve upon the scattershot approach employed thus far, but it’s still an unknown

Last year was painful for many. Along with those who lost loved ones to Covid-19, perhaps no one felt that pain more than the essential worker, the low-income single parent, the isolated, the marginalized. Often they were the same person. Whether Black and poor in a densely populated city, or White and secluded in a rural area, large numbers of Americans who were already struggling before the pandemic came under even further strain. Adding to the distress, these people were deprived of a lifeline that allowed many of the rest of us to endure the lockdowns and limitations on our routines without undue difficulty: internet access.  

Compared to health care and running water, internet connectivity may not seem so vital. But the pandemic showed why that thinking is wrong. Quarantined households have relied on laptops and tablets to stay connected to work, school and other humans — as well as file for unemployment, search for and apply to jobs, visit a virtual doctor appointment or schedule a Covid-19 test. Those who can’t connect are at a severe disadvantage. While the lucky ones treat the new year as a milestone — celebrating the end of 2020 through TikTok dances and Instagram memes — the virus and the economic gaps it blew wide open haven’t resolved just because the calendar changed. The story of kids without Wi-Fi doing homework from a Taco Bell parking lot that went viral in August shouldn’t be thought of as a snapshot in time, but rather a constant.

When Joe Biden takes office as president later this month, the four policy areas that he and his White House transition team have said they’ll prioritize are Covid-19, the economic recovery, racial equity and climate change. Tackling these interconnected yet discrete crises depends in part on ensuring that every American has access to high-speed internet. This is achievable, but it will require a high degree of collaboration between the public and private sectors as well as careful planning of resources — both of which are lacking from the US government’s effort now. Biden has the opportunity to change that. 

To begin with, officials actively working to close the so-called digital divide need to be able to answer this most fundamental question: Where is it? Determining precisely who in the country has internet and who doesn’t would greatly improve upon the scattershot approach employed thus far, but it’s still an unknown. Biden has already promised $20 billion for rural broadband infrastructure (and related job creation), and that’s a good thing; however, “rural" ignores half the problem, which is that plenty of urban dwellers don’t have affordable access, either.

The need for more accurate broadband mapping has been a continuing frustration for the industry and its regulators. The Federal Communications Commission estimates that 18 million people in the country don’t have broadband access, and yet almost no one believes that number to be correct. It relies on census-block-level data that by the FCC’s own admission is flawed. Even if just one household in a census block has internet, that counts. And even if an internet provider doesn’t offer service somewhere but says it “could" in the future, that counts, too. BroadbandNow dug into this discrepancy, and after checking service availability for more than 11,000 random addresses, it estimates that 42 million Americans don’t have a way to purchase broadband internet. That’s more than double the FCC’s count.

The cohort that probably has the best sense of the true picture are companies with which the government has a notoriously tenuous relationship: technology giants whose devices and software are ubiquitous. The Justice Department sued Google’s parent Alphabet Inc. last year over antitrust violations, while another lawsuit was brought by dozens of state attorneys general. Likewise, the Federal Trade Commission sued Facebook Inc., alleging that it, too, is an illegal monopoly. House lawmakers have also accused Inc. and Apple Inc., along with Google and Facebook, of anti-competitive behavior. 

Data from Microsoft Corp. (which hasn’t found itself in the same regulatory crosshairs of late) has provided the most eye-opening look at the digital divide. Rather than access, Microsoft pulled anonymized data from its various consumer services — such as Windows, Office, Bing, MSN news, sports and weather — to study usage. As of November 2019, it found that about 157 million people in the US weren’t using the internet at broadband speeds of 25 megabits per second. That’s roughly half the population. 

Last year, Congress passed the Broadband Deployment Accuracy and Technological Availability (DATA) Act, requiring the FCC to collect more granular data to be able to make better funding decisions while calling for a crowdsourcing process that can challenge service providers’ claims. But that’s only the tip of what needs to be done. The urgency of the country’s broadband needs, especially during the pandemic, calls for appointing a czar dedicated to this mission, according Bhaskar Chakravorti, dean of global business at Tufts University’s Fletcher School and founder of its Digital Planet research initiative. 

Blair Levin, who directed the writing of the 2010 National Broadband Plan for the FCC, agrees that someone needs to supervise the effort more directly. “For every problem there has to be someone who goes to bed thinking about the work and feeling like their professional reputation is on the line if good things don’t happen. I don’t know who that person is today," said Levin, who is now policy adviser to New Street Research LLP.

The effectiveness of a digital czar or any such strategy may be helped by this week’s Senate runoff election in Georgia, where Democratic victories flipped the chamber, leaving fewer roadblocks to Biden’s policies. That said, internet access is largely a bipartisan issue, and red states have some of the biggest holes to fill. Alabama, Arkansas, Georgia, Louisiana, Mississippi, Missouri, New Mexico and Texas each had at least seven “internet desert counties" where more than half of residents don’t have broadband and at least 30% of families with school-age children live below the poverty line, according to a July report from BroadbandNow.

Individual states and tech and communications companies have their own projects aimed at getting more Americans online, and all of that helps. But a more collaborative approach utilizing technologies from a variety of industry sources would be better. The costly process of running a fiber-optic cable to every home in the US is an impractical solution, according to Microsoft President and Chief Legal Officer Brad Smith. “That’s how you turn a $15 billion problem into an $80 billion problem," he said. Microsoft’s Airband initiative uses television white space, the unused frequencies between channels, to transmit signals that travel far enough to cover spread-out rural communities. Other technologies include low-Earth-orbit satellites, which Amazon and Apple have invested in. Google also has fiber assets.

The political pressure on tech companies gives lawmakers and regulators unique leverage to make a harder push in these directions. While the concerns of tech overreach are legitimate, framed differently, there’s a substantial portion of the country for which those issues are beside the point because they don't have internet. “You’ve got these tech companies under a microscope right now, and each one has the capability to close a significant portion of the broadband gap in the US," Chakravorti said. “Start these conversations now."

This is hardly a thorough list of what the next administration could do better — there’s also the chance to fix the shortcomings of federal subsidy programs such as Lifeline (that’s a story for another day). But ending digital inequity has the potential to be the most meaningful pursuit of the Biden White House, as it would ensure more equal access to education, employment, health care and ultimately, wealth. The process can be patchwork, but it needs to start with honest data showing the areas of biggest need and then not just reaching across the aisle, but across the entire tech landscape.

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

Courtesy - Livemint.


Tuesday, January 5, 2021

The politics of Covid-19 just got even more hellish (Livemint)

Tyler Cowen , Bloomberg

New strains of the virus mean the world is about to face some of the most difficult trade-offs yet

A new strain of Covid-19, more contagious than previous strains, is now circulating in dozens of countries. Other new strains, such as one first detected in South Africa, will almost certainly emerge. Aside from the challenges these mutations pose to public health, they will also be a test of our moral and political principles. As exhausted as we all are from making stressful judgments throughout this pandemic, we are about to face some of the most difficult trade-offs yet.

Preliminary data indicate that the new strain in the U.K. allows the virus to spread from one person to another more easily. The practical upshot is that even the strict lockdowns of early 2020, such as the one just ordered in the U.K. by Prime Minister Boris Johnson, may not be enough to reverse the spread of the virus.

It is far from obvious that politicians will be able to sell voters on strict lockdowns if they still allow the virus to spread. Furthermore, vaccine distribution has been sufficiently slow that a full lockdown would have to last for many months, and that probably isn’t feasible or desirable. Yet not having lockdowns would lead to a much more rapid spread of the virus, overloading hospitals and public health facilities.

It’s hard to come up with the moral language to compare those outcomes when all of them are unacceptably bad. Trust in elites is already weak in the U.S., and it is likely to wane further. Whatever one might think is the correct course of action, how exactly would or should a President Joe Biden present and defend it to the public?

A further set of moral dilemmas comes from the interaction of viral spread and the vaccine process. If the virus is spreading more quickly, then so should vaccinations. The U.K. will be vaccinating a greater number of people with a single dose, and giving them the second dose somewhat later, rather than reserving second doses for a rapid follow-up within two to three weeks. The Brits also might experiment with giving a first dose of one vaccine, and a second dose of a different vaccine, to stretch the available supply. That might work, but it is also untested and thus it involves some risk.

Whatever you think of those approaches, the public health establishment is not well-geared to evaluate and present them to the public. The common mentality and message in public health is “safety first." Yet none of the available approaches increases the level of safety or avoids major additional risks.

One option would be for public health experts to speak explicitly in terms of “expected value" and medical triage, and to be upfront about how many lives are being sacrificed and according to which standards. An alternative would be to retreat into a defense of status-quo vaccine allocation procedures, insisting that major changes would involve risks, and maximizing blame avoidance rather than seeking the best outcome.

Either way, the public health bureaucracy doesn’t appear to have much ability to negotiate such treacherous shoals. Perhaps more condescension is what should be expected.

The biggest moral dilemmas might come in those countries that to date have been fairly successful at containing the spread of the virus. Apart from restrictions on foreign travel, life in Taiwan has been normal for some time now, and Covid-related casualties have been miniscule. Other successful examples of virus containment can be found throughout Asia and the Pacific.

But how will those countries deal with the new strain? It has already appeared in both Taiwan and China. So far it has not taken over, but the previous tactics of quarantine and tracing may no longer suffice, should the new strain become more active. It is already spreading in Denmark, which did a good job against Covid-19 early on.

Imagine being a leader of a country that has successfully contained Covid, and now realizing that a single mistake could undo almost a year of very hard work. You also know that, precisely because your country has been so effective at fighting the virus, it is not on the verge of vaccinating your entire population. What if you let a single returning citizen pass through customs taking one Covid test rather than three? What if you then cannot control the subsequent spread of the strain that person is carrying?

When was the last time that stakes for such apparently minor decisions were so high? How will leaders deal with the extreme moral anxiety that their decisions will likely induce?

It is like we are living in a horror movie, and just when we think it’s over, the monster comes back, stronger than ever.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Tyler Cowen is a Bloomberg Opinion columnist.

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

Courtesy - Livemint.


Monday, January 4, 2021

Leadership is often about getting out of your own way (Livemint)

Jeffrey Pfeffer , M. Muneer

Whenever people make statements about wanting to meaningfully change the trajectory of their lives, organisations, or the world, they tend to converge on one topic: Power. This is a fundamental dimension of organisational and social life. Yet, as Rosabeth Kanter noted years ago, power is a topic that makes people uncomfortable—one that they sometimes shy away from. Is this a reason that so many otherwise promising careers get derailed by political setbacks?

Power is one of the most important social forces, and is essential for major accomplishments. It often involves challenging assumptions and taking people out of their comfort zones. But it shouldn’t make us uncomfortable. It’s foundational to success at work—for chief executive officers (CEOs), political leaders, managers and new recruits alike. Research by a Florida State professor shows that possession of a political skill, the ability to develop and wield power effectively, leads to better performance, employee support, and superior outcomes on compensation, career success, life satisfaction, etc. Having worked with a multitude of people around the globe, we are convinced that people themselves are often their own biggest barrier to achieving the power and positions they seek.

One, pay attention to how you define yourself. We know of an Indian Institute of Technology gold medalist who went to Stanford to do his masters in artificial intelligence and had landed a top-notch job, but his LinkedIn profile and biodata were matter-of-fact. He felt he could have done more courses at Stanford and that he was not much of an expert in his chosen field despite the fact that he was chosen as a research assistant in his first term by a top professor for a coveted project. He also had two patents under his belt before taking up a cushy job at a global corporation. He underplayed his achievements because, as it appeared, he was misled by the notion of modesty, given his Indian middle-class background. Modesty is fine once your accomplishments are well recognised, but not early in your career. He has since then redone his profile since for others to get a better-rounded view of his abilities.

Those who believe modesty is a virtue often use self-deprecate, fail to promote their accomplishments and act in ways that give away their power. Don’t be one of those people. Self-handicaps are harmful.

Two, don’t accept constraints imposed by others. We closely know at least three women leaders who broke the glass ceiling to run their respective global conglomerates at a young age. What’s common to them is their resolute unwillingness to conform to gender-norm expectations—or to let others impose constraints on who they are and what they can (and will) do.

As one of them said in a recent email: “I don’t choose to be relegated to a lower status role. I have no problem challenging people or making them rethink their assumptions. There are many examples—you are a woman or you are a surgeon. I don’t feel like I have to ‘stay in my lane’. The head honcho who hired me asked me, ‘Do you not see the boundaries between disciplines?’ I replied, ‘No, why should I?’" This leader is currently running an adaptive drug design study for covid-19, although she is a breast cancer surgeon. If you have something you think you can contribute to a decision, refuse to let others keep you out of it.

Three, stop worrying about being liked. People worry too much about this. Look at most leaders you see around today. If you want to be liked as a leader, get a pet that will love you unconditionally. Enterprises do not hire executives for them to win popularity contests. Your responsibility is to get things done and make the business successful. Many CEOs of startups, including those of Zomato and Tesla, never feared taking hard decisions and have said in public that they aren’t worried about being disliked by many.

In one study, we saw that when people’s outcomes—their rewards and success—depended on the overall success of the group, they were willing to prioritise competence over sociability (or niceness) in choosing people to work with. Fundamentally, people love to be part of a winning effort. Your first responsibility as a leader is to produce success, not to be loved.

Four, don’t let unfairness become an excuse. There are at least two ways in which to respond to any unjustness—gender- and race/caste-based discrimination, for instance—that remains all too pervasive. One is to use being unfairly treated as an excuse for under-performance. Reframe things in ways that tell you what to do, instead. If being an “only" makes you stand out, use that uniqueness to your advantage.

It may be comfortable to make excuses and impose self-handicaps, but it diminishes the likelihood of achieving power. Power is leverage—allowing you to change things for the better. Power accelerates careers, permits bold accomplishments, and increases life satisfaction.

Yet, one of the biggest barriers to acquiring and using power is our own feelings, and our reluctance to acquire and use influence. Remember, the first rule of power is to get out of your own way. The most powerful people describe themselves as fearless, shameless, bold and brave. They have gotten out of their own way by dropping the scripts that hold them back.

Jeffrey Pfeffer & M. Muneer are, respectively, chair professor of organisational behaviour at Stanford University, and co-founder of Medici Institute.

Courtesy - Livemint.

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